HONG KONG (Reuters) - China Mengniu Dairy Co Ltd’s 2018 net profit jumped 49 percent, boosted by stronger sales on an improved product mix and stable raw milk prices.
Net profit for January to December came in at a record 3.04 billion yuan ($452 million), up from a profit of 2.05 billion yuan in the previous year, the country’s top milk products manufacturer said in a statement late on Wednesday.
That compared with an average forecast of 3.01 billion yuan by 24 analysts, according to estimates compiled by Refinitiv.
Revenue rose 14.7 percent to a record 68.98 billion yuan from 60.16 billion yuan a year ago. That compared with an average forecast of 68.9 billion yuan for 2018. Gross profit margin rose 2.2 percentage points from a year ago to 37.4 percent.
“In 2019, it is expected that cost of raw milk will remain steady with mild increase and the industry will continue to see structural upgrade,” Chief Executive Officer Jeffrey Lu said in the statement.
“Dairy product consumption in the market is going to enter a period of rapid growth and the dairy industry will move into a positive development cycle,” Lu added.
Mengniu is stepping up development and sales of premium products and is working with major shareholders and partners like Danone Group and Arla Foods to bring more dairy goods to China, and teams up with Alibaba to increase the global reach of Chinese dairy products.
Shares of Mengniu have gained 8.6 percent so far this year, lagging a 11.2 percent rise in the benchmark Hang Seng Index.
Reporting by Donny Kwok; Editing by Rashmi Aich